Bids and tenders: Best practices and process

Written by
Wendy Gittleson
Wendy Gittleson
Updated on
  12 min read

The goal has to be right for us, and it has to be beneficial, in order to ensure a beneficial process. But aside from that, it’s really the process that’s important.

“The Tao of Pooh” by Benjamin Hoff

A recent Google search for “bids and tenders” and their North American identical twin, the “RFP,” yielded a surprising amount of passion. Hidden under a blanket of presumed internet anonymity, response professionals felt free to say what they really thought about the documents, and much of it wasn’t flattering. 

Here are just a few of the more suitable-for-work quotes from Reddit:

  • I get the point of them but they take so long to do and it’s always a rush to finish on time, it’s so much unnecessary stress on everyone involved.”
  • I have run an agency for 10 years. I don’t do RFP’s. Haven’t for years. I feel like they are rigged and I am just being asked as a second opinion to show due diligence. I’ve “won’ a few over the years but honestly the effort and time has never been worth it.”
  • I never do them unless I’m building them with the client and the only reason we are doing the RFP is because they need to and it’s basically a dog and pony show and I’m going to get the business.
  • Unless you’re dealing with a state or government agency or someone that has basically said it’s going to the lowest bidder no matter what, you will almost never win random RFPs.”

It’s understandable. Bids and tenders are long and time-consuming for both issuers and responders. They can take days or even weeks to complete, and they often involve input from multiple stakeholders. 

It’s worth noting that the tendering and bidding process is about far more than pricing and deliverables. It ensures fair competition, accountability, compliance, transparency, and more. 

Bids and tenders are often precursors to massive projects and might include questions about everything from the number of current employees to financials to a company’s charitable contributions. Essentially, all public-facing (and beyond) company information is within limits. Publicly held companies are generally open books, at least for non-product questions, while privately held companies may hold back some information.

With more than $11 trillion of revenue generated through bids and tenders, it’s clear that someone is winning them. A recent study by Responsive and Callan Consulting found that those who take a strategic approach to bid management win more and generate significantly more revenue. 

So, how does an organisation garner the love that bids and tenders deserve? How do you turn them into business opportunities instead of tedious to-dos? How can issuing and bid professionals quickly and thoroughly communicate their needs and offerings without stretching resources beyond their capacities? By adopting a strategic approach and a thoroughly defined process. 

Let’s explore what that means.

Table of contents

What are bids and tenders?

A request for tender (or invitation or call to tender) is an opportunity to bid (hence bids and tenders) on large or complex products or services, such as hardware and software, financial services and healthcare services. Though most industries issue tenders, they are most common in financial, healthcare, and technology sectors. Construction firms, commercial real estate firms and manufacturers also receive tenders. 

In North America, tenders are primarily called RFPs, however, financial firms and the public sector generally issue tenders.

There are three types of tenders: open, selective and negotiated. 

  • Open tenders typically include a public announcement inviting any vendors to bid.
  • Selective tenders go to a limited number of pre-chosen vendors. 
  • Negotiated tenders are offered to preferred vendors or those in the contract renewal phase. 

Bids and tenders example

A company seeking a new payroll system might issue a request for tender asking if a vendor can meet its deliverables, criteria, security requirements, future viability, and stability, and even whether a vendor’s hiring procedures and values meet its own. All of the questions have to be answered within a set amount of time. 

As you might expect, responding to such a comprehensive document requires input from an array of subject matter experts (SMEs), potentially including senior leadership. Managing this process effectively demands strong project management skills and extensive company knowledge. It’s no wonder that bids and tenders frustrate so many people.

The bid and tender process explained

Bids and tenders require strict processes from both issuers and vendors, typically under tight time constraints. Buyers must ensure that they issue tenders to viable organisations and include all relevant questions. 

Vendors then need to determine whether the opportunity is a good fit and ensure that their responses are accurate, professional and on-brand. 

So what are the best practices for issuers and vendors? Let’s follow a bid and tender through its lifecycle.

Invitation to tender

Invitations to tender are part of the procurement process. In many countries, large public sector purchases must originate from a tender. 

Entering into a business relationship is a lot like entering into a partnership. Buyers must ensure value and whether a vendor can meet delivery, privacy, regulatory, and softer requirements, such as compatible values. 

The issuing process generally includes three steps:

  1. Prequalification — Procurement professionals invite vendors to bid after considerable research, saving time on vendors that are not a good fit. 
  2. Writing — Procurement professionals work with SMEs — such as IT, legal and finance personnel, and, of course, the teams requesting the purchase — to ensure that they know all of the requirements and convey them clearly to potential vendors. Bids are easier to read when the most important elements are clearly designated. 
  3. Issuing — Buyers generally issue their questionnaires through spreadsheets, Word documents, or branded templates. They are typically sent through email, customer relationship management tools, or bid and tender portals. 

Bid creation and submission

For as much work as procurement professionals put into issuing tenders, they at least have the advantage of calling the shots. Bid professionals not only have to answer all the queries, but they also have to read between the lines to anticipate priorities and present them in a way that is clear, understandable and compelling to prospects. They also need to establish and abide by strict timelines and herd disparate teams of subject matter experts along the way.

Bid professionals have an eight-step process to help manage time and create the best possible outcomes:

  • Go/no-go decision making — Those frustrated response professionals from earlier in this blog might take an informal ‘throw pasta at the wall and see what sticks’ approach, responding to every tender request that comes in. However, selective companies have the highest win rates. Before moving forward, determine whether the opportunity is a fit, how winnable it is based on past experience, and whether it aligns with company goals.
  • Project kickoff — Meet with stakeholders to assign roles, responsibilities, timelines and objectives. A Strategic Response Management (SRM) platform like Responsive can help keep your team on track.
  • First draft — Roughly 80 percent of the questions in a tender are essentially standard, meaning you’ve answered them before. An SRM platform with a knowledge management system will automatically pull from previous responses to give you a major head start. 
  • Review and revise — Now that you’re most of the way there, it’s time to address the rest of the document. Check each answer to ensure accuracy, compliance, and quality. For answers to new questions, connect with the appropriate SME. 
  • Submit — Submit the bid in the buyer’s preferred format before the deadline. The earlier, the better. Let your team members know as soon as you receive the receipt. 
  • Save responses — Add your responses to your knowledge library for future use. The best SRM platforms will do this for you automatically.
  • Hold a postmortem — What went right? What didn’t? Do a thorough assessment so that you can continuously improve your strategic response processes. 

Evaluation of responses 

Now that the issuer has received the responses, it’s time for the buyer to evaluate them and narrow them down. This is a time-consuming and exacting process, so it’s best to involve a team. 

We recommend:

  1. Standardise criteria—Determine scoring and weighting criteria. Scoring generally refers to price and answer quality. Scoring criteria vary between companies and even tenders. Weighing evaluates the importance of each question and answer pair. Be sure each team member knows the criteria.
  2. Score and weight — Use your criteria to score and weigh each answer.
  3. Clarify the bid—Contact the vendor if you have any questions. This is not a time for negotiation, just for clarity. Those clarified answers should be included in the contract, if the deal reaches that stage. 
  4. Send to a moderator — Once the bid is thoroughly reviewed, scored and weighed, it should be sent to an expert who was not involved in the scoring process. Reexamine if the scoring doesn’t match until you reach a consensus with the moderator.

Selecting the best fit 

Once you’ve reached a consensus on your weights and scores, and have narrowed down the choices, it’s time to choose your vendor. It isn’t uncommon for multiple vendors to score similarly. If that’s the case, you might ask for additional clarity from vendors or ask for advice from leadership.

Once you’ve chosen, all vendors should be notified in writing, regardless of whether their bids won or not. After that, many governments mandate a waiting period during which a vendor can request feedback or call for a review. 

The challenges of submitting winning bids

If you’re like many of our readers, you’re an experienced bid professional facing increasing demands without enough resources. Your capacity and win rates might be suffering as a result, and your team could be experiencing burnout.

The difference between a winning bid and a losing one often comes down to processes. As tenders become longer and more detailed with shorter timelines, it’s crucial to be prepared before receiving the next tender. To avoid submitting a subpar bid that could harm your company’s reputation, address these challenges before they crop up:

  • Timeline — While you might occasionally find a buyer with some flexibility around their timeline, taking that extra time could leave a bad taste in the buyer’s mouth. As you know, adhering to the buyer’s timeline requires establishing strict timelines for each stakeholder.
  • Bid/no-bid decision-makingAutomated document shredding and advanced data analytics are critical to determining whether a bid is even viable. Have you won such a bid before? Can you meet the buyer’s needs? 
  • Resources — Increased demands make it difficult to remain competitive with manual bidding processes. Do you have an SRM solution that stores previous answers to avoid asking SMEs to repeat themselves? Do you have writing assistance? How are you leveraging AI to speed things up?
  • Team coordination — Siloed business structures and remote teams make team coordination challenging. Use an SRM platform for better collaboration.
  • Knowledge management — When it comes to knowledge management, we typically see one of two scenarios. Bid teams are either buried under redundant, obsolete or trivial (ROT) information or the information repository is so limited that responders have to start from scratch, every single time. Having a knowledge governance plan in place will ensure that previous responses are stored and catalogued for future use and that content is regularly audited to weed out the ROT.
  • Quality assurance — Checking every answer for quality and accuracy is arguably the most important step in the process. Well-written, thorough and accurate bids don’t just help win deals; they also protect your organisation from misrepresenting itself and potential litigation.
  • Analytics — Data analytics help with every step of the bid process. They can help you determine whether it’s worth pursuing a deal, find the most helpful information, track time spent, and identify areas for improvement. They can also provide context and the information needed for larger business decisions.

Best practices for bidding on tenders

The word “bidding” doesn’t fully capture the complexities of the process. A bid is often the first step to a long-term contract, and buyers care about more than just pricing. They want to ensure they are partnering with a company that delivers quality products or services on time, provides excellent customer service, understands their goals, complies with regulations, and shares their values.

Conveying all this is a lot for one person or even a team. But, if you are proactive and establish repeatable processes, you’ll be able to accurately and efficiently address issuers’ real priorities and ultimately win more business. For best practices, we recommend the following:

Always conduct a bid/no-bid analysis

For optimal win rates, be as selective as the buyers. Bidding on a deal that your company can’t fulfill, probably won’t win and doesn’t align with your business goals is not just a waste of your time. It also wastes the issuer’s time when they are forced to scroll through dozens or hundreds of pages just to learn that you aren’t a fit. 

Only bid on tenders that you can win

Before taking on a project, determine if the project is a good fit and winnable. Ask yourself these questions:

  • Have you won similar deals in the past? 
  • Can you be competitive? 
  • Is it worth it to your organisation? 

Read through each tender to make sure you understand what the customer is asking for. Leverage tools like Responsive’s Requirements Analysis to shred RFPs in minutes to create compliance and responsibility matrices. 

This step may require input from several stakeholders as well as a thorough understanding of customer needs before moving forward.

Leverage Strategic Response Management (SRM) software to respond competitively

Most tender questions have been answered many times before. For example, if a tech company is seeking a payroll solution, you’ve likely encountered similar requirements from other issuers.

Advanced AI-driven SRM software uses historical and current data to assess if a deal is worth pursuing. It scans the tender to isolate key information and helps you automatically respond to the repetitive 80 percent, allowing you to focus on the unique 20 percent. This time-saving process enables you to refine and present a bid that is sure to impress.

Intelligent workflow management leverages AI to help you choose the right authors and SMEs. It even consults company-facing calendars to verify availability. Workflow management keeps the project on track, every step of the way and enables project managers to check progress. 

An automated SRM Content Library curates brand-vetted and up-to-date content for accurate responses. A customizable template library and autogenerated visuals create on-brand proposals that are sure to capture buyers’ attention. 

Build a collaborative strategy for response

Responsive conducted a Facebook survey asking what increases team productivity above all else. 89 percent of respondents cited effective collaboration. Three studies published in Harvard Review found that attempting to collaborate across silos can lead to burnout and even aggressive and abusive behavior. Another survey found that the average team wastes over 20 hours a month due to poor collaboration. 

We aren’t suggesting that you restructure your organisation, but there are ways to bridge the silos that impact collaboration. Project management and simple communications can help bring even the most disparate teams together. SRM software goes even further in simplifying collaboration with features such as in-app @mentions, real-time project management tools, and integrations with existing collaborative platforms. 

Case study: Improving win rate by 15%

IBA, an enterprise-level medical device manufacturer in Belgium, faced multiple challenges in its bids and tender processes. The inherent repetitive nature of tenders made the “tender specialists” feel more like “assistants.” IBA’s manual processes also took up too much time and were repetitive. Their content was scattered and siloed, and they didn’t have the time or resources to generate quality responses.

IBA Global Director of Sales Support and Tender Management, Grégory Saive, issued a request for tender to find a solution. After reviewing four companies, he chose Responsive, largely because of our advanced AI-driven search functionality. 

After just one year of using Responsive, IBA’s win rate ballooned to an impressive 80 percent — about a 15 percent increase. They now have a single highly searchable Content Library and IBA’s tender specialists once again feel like specialists.

Read the full IBA story here.

How Responsive speeds up and simplifies bidding on tenders

Responsive is the world’s number one AI-powered Strategic Response Management platform. Its best-in-class AI assists bidders through every step of the bidding process. 

  • Data-driven analytics provide the intelligence for bid/no-bid decision-making and prepares you for the future with actionable postmortems. 
  • Requirements Analysis shreds tenders, summarising the most important aspects and providing valuable insight to speed up the bid/no-bid process
  • Project management tools keep everyone on the same page and help ensure you stay on track. 
  • In-app @mentions and the industry’s most comprehensive integrations let people collaborate without blockers — from anywhere in the world. 
  • The Content Library is a single source of truth for all current and compliant company knowledge, including previous bids. 
  • AI writing tools like Auto Respond and AI Assistant do much of the work for you by helping you find and refine the answers and generate bids representing your organisation in the best possible light.

In short, Responsive provides the tools to help your team be more efficient without adding headcount and help your company win more of the right bids, ultimately increasing revenue and profit.

Wendy Gittleson

Wendy has more than 10 years experience as a B2B and B2C copywriter. She developed a passion for writing about tech from living in the San Francisco Bay Area and working for a technology school. From there, she transitioned to writing about everything from SaaS to hardware and cloud migration. She is excited to be part of the wonderful team at Responsive and looks forward to playing her part in building the future. Connect with Wendy on LinkedIn.